Loans

Rosemont College participates in the direct loan which means that federal loans are originated with the federal government instead of with private lending institutions, a common practice used by many schools prior to July 1, 2010 in which all schools were converted to the direct loan system.

Students who qualify for federal student aid generally qualify for Direct Loans. The maximum amount a student can borrow is determined by his or her grade level. First year students can borrow up to $5,500; second year students can borrow up to $6,500; and third and fourth year students can borrow up to $7,500 for the academic year. The annual loan limits include $2,000 Unsubsidized Direct Loan eligibility per academic year. Independent students may be able to borrow additional Unsubsidized Direct Loan in addition to the base loan amounts. Independent students may be able to borrow up to an additional $4,000 Unsubsidized Direct Loan for the first and second academic year and up to an additional $5,000 for the third and fourth academic year. Dependent students whose parents are denied the PLUS can borrow at the same loan limits as independent students.

Annual Loan Limits - Direct Loan
Dependent
Students
Combined Base Limit for Subsidized and Unsubsidized Loans Additional Limit for Unsubsidized Loans Total Limit for Subsidized and Unsubsidized Loans
First-Year
Undergraduate
$3,500 $2,000 $5,500
Second-Year
Undergraduate
$4,500 $2,000 $6,500
Third & Fourth Year
Undergraduate
$5,500 $2,000 $7,500
Independent
Students
Combined Base Limit for Subsidized and Unsubsidized Loans Additional Limit for Unsubsidized Loans Total Limit for Subsidized and Unsubsidized Loans
First-Year
Undergraduate
$3,500 $6,000 $9,500
Second-Year
Undergraduate
$4,500 $6,000 $10,500
Third & Fourth Year
Undergraduate
$5,500 $7,000 $12,500

The amount of Direct Subsidized/Unsubsidized Loan listed on the financial aid award letter is the gross amount. The government charges loan processing fees of 1% upfront on all new loans effective July 1, 2010 with an upfront rebate of .05% for future on time payments for a net fee of .05%. The net amount of the loan will be reflected on your student bill. A Direct Plus loan has a loan fee of 4.0% with an upfront rebate of 1.5% for a net fee of 2.5%.

If the student has financial need, a portion of the Direct Loan will be Subsidized (which means the federal government pays the interest during the enrollment and 6-month grace periods). If the student has no financial need, if the financial need has been met through other sources, or if the student has already borrowed the maximum Subsidized, then the Direct Loan will be Unsubsidized (the student is responsible for the interest during the enrollment and 6-month grace periods). Interest on Direct Unsubsidized Loans begins to accrue after disbursement, however, the student may choose to have the interest payments deferred during enrollment and capitalized (added to principal) at the time repayment begins.

Direct Subsidized Loans for undergraduate students disbursed between July 1, 2011 and June 30, 2012 will have a fixed interest rate of 3.4%, and Direct Unsubsidized Loans during this timeframe will have an interest rate of 6.8%.  For graduate students, both Direct Subsidized/Unsubsidized Loans will have a fixed interest rate of 6.8% 

In addition to the annual loan limits, there is a limit to the total amount a student can borrow during his or her educational career. The chart below summarizes the lifetime Direct Loan limits.

Aggregate Loan Limits - Direct Loan
  Combined Base Limit for Subsidized and Unsubsidized Loans Additional Limit for Unsubsidized Loans Total Limit for Subsidized and Unsubsidized Loans
Dependent Undergraduate Students $23,000 $8,000 $31,000
Independent Undergraduate Students (and dependent students whose parents were denied a PLUS loan) $23,000 $34,500 $57,500

Direct PLUS Loan

The Direct PLUS Loan is a credit-based federal loan program for the parents of dependent undergraduate students.  Credit-worthy parents can borrow the cost of education not covered by other aid through the Federal Direct PLUS Loan program.  The interest rate is fixed at 7.9%.  If the parent of a dependent undergraduate student does not qualify for the PLUS Loan, the student would be eligible to borrow additional Direct Unsubsidized Loan. First and Second years students can borrow up to an additional $4,000 Direct Unsubsidized Loan, and Third and Fourth year student can borrow up to an additional $5,000 Direct Unsubsidized Loan per academic year.  Dependent students whose parent is denied the PLUS have Direct Loan borrowing limits identical to those of Independent students.  Parents must re-apply and be credit approved each year to borrow through the PLUS Loan program.

Perkins Loan

The Perkins Loan is a federally-funded loan program for students with high financial need.  The Perkins Loan has a fixed interest rate of 5%.  Repayment of principal and interest begins nine months after the student ceases to be enrolled on at least a half-time basis and generally extends over a 10 year period.  Funding is limited, and students will be notified of Perkins Loan eligibility on their financial aid award letter.  A Perkins Loan Master Promissory Note (MPN) and Perkins Loan Entrance Counseling are required to borrow the Perkins Loans.

Private Student Loans

After exhausting the opportunities available from the federal aid programs, students may consider private or alternative loan programs as a source of funding. The terms and conditions of these credit-based loan programs vary, and as such, students are encouraged to review the details of the programs before selecting an alternative loan program. Private loans are not eligible for loan consolidation programs made available for federal student loans. Interest rates, fees (both at the time of borrowing and at repayment), credit checks, and annual and aggregate loan limits require careful evaluation by the student as a consumer and are generally less advantageous than those of federal loans. Taking on debt for any reason should be done deliberately and only for the amounts needed. Additional information about the difference between federal and private student loan programs is available from the U.S. Department of Education publication Federal Aid First.

Beginning in the fall of 2010, Rosemont College will be participating in the Pennsylvania Private Loan Marketplace.  The Pennsylvania Private Loan Marketplace is an online education financing resource that enables consumers to learn about and compare private loan terms from multiple lenders. To begin the private loan process, visit Pennsylvania Private Loan Marketplace.

Loan Calculator

Loan Payment Calculators can compute an estimate of your monthly loan payments and the annual salary required to manage them without too much financial difficulty.  This loan calculator can be used with Federal education loans

(Direct Subsidized/Unsubsidized Loans, Perkins and PLUS) and most private student loans. Click here for the Loan Repayment Calculator.

Loan Exit Counseling

Federal regulations require that students who borrow from the federal loan programs receive loan exit counseling upon graduation or dropping below half-time enrollment status.  Exit counseling provides details regarding a borrower’s rights and responsibilities for student loan repayment as well as deferment and forbearance options.  Direct Loan Exit counseling should be completed online at NSLDS (National Student Loan Database).

Information regarding loan forgiveness programs and other helpful tools are also available at the Federal Student Aid website.